Consumers should be able to choose who they buy electricity from, says a report prepared by The Energy Research Institute (Teri) for the Competition Commission of India (CCI).
The law, as it stands, allows the consumer freedom to choose, but the fact is that they are tied down to the distribution company located in their area of residence.
“Open access is a principle accepted anywhere in the world and in Australia, it is part of essential facilities doctrine. We need to implement them in India too,” said Vinod Dhal, acting chairman, CCI.
The Electricity Act 2003 provides for non-discriminatory open access in the transmission segment and has mandated SERCs (State Electricity Regulatory Commissions) to introduce open access in distribution after taking into consideration state-specific conditions. The regulation for open access in inter-state transmission was notified by the Central Electricity Regulatory Commission in 2004.
According to Uddesh Kohli, former chairman and managing director, Power Finance Corporation Ltd, though the legal and policy framework for open access is in place, many SERCs have still to come up with necessary regulations.
“We need a number of players (suppliers) to ensure competition. At present, there is only one distribution utility in each geographical area so consumers have little choice,” he said. Kohli also said distribution has been privatized only in Delhi and Orissa and that the experience has not been very positive so far.
“We need a separate set of players who own distribution lines and suppliers who supply power by hiring the distribution line capacity. Besides, we need a surplus power situation where supply is more than demand and there is true competition,” he added.
India has only one central power transmission utility—the Power Grid Corporation of India Ltd (PGCIL). Apart from handling the power transmission projects in the country, PGCIL is also the nodal agency for real-time management and monitoring of the power requirements in the country, also known as the load dispatch functions.
When contacted to give his comment on the Teri report, R.P. Singh, chairman and managing director, PGCIL declined. The government, at a recent meeting of the committee of secretaries, had decided to separate the power management functions of PGCIL and create a new subsidiary under PGCIL to handle it. The new subsidiary, to be formed within a year, will be spun off as an independent company under the power ministry within three years of its formation. This would bifurcate the functions of the corporation.